IMF boss Arrested for Alleged Sexual Assault

Dominique Strauss-Kahn, head of the International Monetary Fund and a presidential hopeful in France, has been arrested and charged of attempted rape, criminal sexual act and unlawful imprisonment, New York City police and the IMF said on Sunday.

The arrest is set to change the course of France’s presidential elections next year, likely depriving the Socialist Part of its most promising candidate and boosting the chances of reelection for French President Nicolas Sarkozy.

“Whatever the outcome of the procedure is, [Mr. Strauss-Kahn] will not be able to run for president,” said Jacques Attali, a former advisor to France’s late Socialist president Francois Mitterrand.

The arrest of Mr. Strauss-Kahn, 62 years old, who was apprehended by police in the first-class section of an Air France plane minutes before it left New York for Paris on Saturday night, also throws into disarray the leadership of the IMF, whose intervention has played a key role helping European leaders manage the continent’s debt crisis.

A law enforcement official in New York said Mr. Strauss-Kahn was taken into police custody on Saturday night after being removed from the Air France plane. Mr. Strauss-Kahn allegedly forced a cleaning woman onto his bed and sexually assaulted her at around 1 p.m. Saturday inside his room at the Sofitel Hotel near Times Square, the official said.

Mr. Strauss-Kahn allegedly allowed the woman to leave and then departed for the airport, the official said. The alleged victim informed co-workers who then alerted authorities, the official said. Mr. Strauss-Kahn left personal belongings behind in his hotel room, including a mobile phone, the official added. Mr. Strauss-Kahn’s attorneys in New York and in Paris didn’t immediately return phone or email messages seeking comment.

“Mr. Strauss-Kahn has retained legal counsel, and the IMF has no comment on the case,” the IMF said in a statement. “The IMF remains fully functioning and operational.”

* IMF Leadership Thrown Into Disarray

The Port Authority police, which has jurisdiction over the city’s airports, was acting at the request of the NYPD, said John Kelly, a spokesman for the Port Authority of New York and New Jersey. The Port Authority turned Mr. Strauss-Kahn over to the NYPD after he was taken into custody. Later in the night, Mr. Strauss-Kahn was formally charged with sexual assault and attempted rape, the NYPD later said in a statement.

Mr. Strauss-Kahn’s arrest is likely to have big repercussions in France, where the French politician was widely expected to participate in France’s Socialist Party primaries and to announce his candidacy as early as late May. The Socialist Party is holding primaries this fall, but candidates have been requested to apply between June 28 and July 13.

Recent opinion polls suggested that Mr. Strauss-Kahn would easily win the Socialist Party nomination and would also go on to defeat France’s President Nicolas Sarkozy in a run-off, due in May 2012.

“It’s a thunderbolt,” France’s Socialist Party chief Martine Aubry told reporters on Sunday. Ms. Aubry is now likely to be the frontrunner in the Socialist primaries, though analysts say she would have a much harder time defeating Mr. Sarkozy in a general election.

The arrest of Mr. Strauss-Kahn also comes at a pivotal time for the IMF. John Lipsky, Mr. Strauss-Kahn’s deputy, said last week that he is resigning in August. Mr Lipsky, the Deputy Managing Director, helped Mr. Strauss-Kahn usher the fund through the global financial crisis. He has agreed to stay on as a consultant through November.

Mr. Strauss-Kahn has shepherded the IMF through a period of expanding supervisory heft and power following the global economic crisis. In the past year, the fund has played a central role in the bailouts of ailing euro-zone nations Greece, Ireland and Portugal.